Tesla TSLA is slated to release second-quarter 2025 results on July 23, after the closing bell. We will focus on the company’s Energy & Service and Other Businesses, which are currently experiencing an improvement in their performance.
TSLA missed earnings estimates in three of the trailing four quarters and surpassed once, the average negative surprise being 8.33%. Before we delve into the factors that are set to shape its upcoming results, here’s a snapshot of its first-quarter 2025 earnings report.
Tesla’s Q1 Highlights
In the first quarter of 2025, the electric vehicle (EV) titan reported earnings per share of 27 cents, which fell from the year-ago figure of 45 cents and missed the Zacks Consensus Estimate of 44 cents. Total revenues came in at $19.33 billion, witnessing a year-over-year decline of 9%. The top line also missed the consensus mark of $21 billion.
Tesla’s first-quarter energy deployment rose to 10.4 GWh from 4.05 GWh in the first quarter of 2024. Energy Generation and Storage revenues totaled $2.73 billion in first-quarter 2025, surging 67% year over year but lagging our estimate of $3 billion. Services and Other revenues totaled $2.64 billion, up 15% year over year.
Tesla had cash/cash equivalents of $37 billion as of March 31, 2025. Long-term debt and finance leases, net of the current portion, totaled $5.3 billion, down from $5.7 billion as of Dec. 31, 2024. The company generated FCF of $664 million during the reported quarter, which fell from $2.8 billion generated in the year-ago period.
Strong Energy & Service and Other Businesses to Aid TSLA
Tesla’s energy storage deployments have been steadily growing over the past year, thanks to expanding Powerwall and Megapack capacity. In the first quarter of 2025, Powerwall deployment hit a record 1 GWh despite ongoing supply constraints. In the second quarter, the company deployed 9.6 GWh of energy storage products compared to 9.4 GWh in the second quarter of 2024. We expect revenues from Energy Generation & Storage business to be $3.04 billion, suggesting a rise of 0.7% year over year. We expect the gross margin from the Energy Generation & Storage business to rise 26.7% from 24.6% in the year-ago period.
In the first quarter of 2025, the company opened more than 1,800 new Supercharging stalls, indicating a rise of 17% year over year. Services and Other unit gross profit rose 25% year over year in the last reported quarter, aided by stronger maintenance and collision services. Services & Other revenues are expected to be around $3.15 billion, suggesting an increase of 20.7% year over year. Gross margin of Services & Other business is expected to be around 10%, up from 6.4% in the year-ago quarter.
While Tesla's core EV business is struggling with weaker deliveries, rising gross profit from Energy & Service and Other Businesses is likely to have somewhat offset Tesla’s losses in the second quarter.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Overall Earnings & Revenue Projections of Tesla
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 40 cents per share, indicating a decline of 23.08% on a year-over-year basis. The consensus mark for earnings per share has moved down by 3 cents over the past 30 days. The Zacks Consensus Estimate of $22.48 billion for sales indicates a 11.85% decline on a year-over-year basis.
Our proven model does not conclusively predict an earnings beat for Tesla, as it does not have the right combination of a positive Earnings ESP and a favorable Zacks Rank. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company has an Earnings ESP of +0.21% and carries a Zacks Rank #4 (Sell) at present.
Stocks With the Favorable Combination
Here are some players from the auto space that, per our model, have the correct ingredients to post an earnings beat this time around.
Lear Corporation LEA has an Earnings ESP of +5.50% and a Zacks Rank #3 at present. The company is set to release second-quarter 2025 results on July 25. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LEA’s to-be-reported quarter’s EPS and revenues is pegged at $3.15 and $5.74 billion, respectively. Lear’s earnings beat estimates in each of the trailing four quarters, the average surprise being 12.98%.
Cummins Inc. CMI has an Earnings ESP of +1.45% and a Zacks Rank #3 at present. The company is set to release second-quarter 2025 results on Aug. 5.
The Zacks Consensus Estimate for CMI’s to-be-reported quarter’s earnings and revenues is pegged at $4.94 per share and $8.51 billion, respectively. CMI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 14.22%.
Rivian Automotive, Inc. RIVN has an Earnings ESP of +5.82% and a Zacks Rank #3 at present. The company is set to release second-quarter 2025 results on Aug. 5.
The Zacks Consensus Estimate for RIVN’s to-be-reported quarter’s loss and revenues is pegged at 66 cents per share and $1.28 billion, respectively. RIVN’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 10.81%.
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Cummins Inc. (CMI): Free Stock Analysis Report Lear Corporation (LEA): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Rivian Automotive, Inc. (RIVN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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